Howard Takes over
Shareholders pay the price
Today, Howard Schultz returns as interim CEO of SBUX while the company looks for a new CEO. The company announced today that it would suspend its stock repurchasing program, effectively immediately to invest in Starbucks employees and stores for long-term growth? The company has plenty of cash to do both, so the move looks to be window dressing for the labor unions. We have the company generating $3.8 billion in FCF and paying $2.2 billion in dividends, leaving $1.5 billion to buy back stock. "This decision will allow us to invest more into our people and our stores — the only way to create long-term value for all stakeholders." On the 4Q21 conference call and reiterated at the annual meeting, the company announced a new commitment of "returning $20 billion to shareholders over the next three years through share repurchases and dividends." In Q1, the company repurchased 31.1M common shares, and 17.8M shares remain available under the current authorization. Mr. Schultz has a town hall planned for Monday, where he will likely focus on store growth, inflation, and competition. At its annual meeting, the company also revealed that it intends to have around 55,000 company-operated and licensed stores across 100 markets by 2030.
CMG Reaching for straws?
Youtuber to drive sales? CMG is a SHORT
May restaurant companies have successfully used celebrity endorsement to drive sales - Shaq and PZZA, McDonald's and Travis Scott, and others. Although, none have long-term staying power as a sales driver. CMG has now turned to Karl Jacobs to drive sales. With over 28 million followers on his combined social media channels, 23-year-old YouTuber Karl hopes to put CMG on the map with the launch of the Karl Jacobs Burrito.
I don't believe this will move the needle on CMG MAUs as Travis Scott did for MCD!
